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Focus On Real Estate: 1099 Reporting On Rental Property

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A provision of the recently signed Small Business Act of 2010 now requires additional tax reporting to the IRS.
December 6, 2010

A provision of the recently signed Small Business Act of 2010 now requires additional tax reporting to the IRS.

All persons engaged in a trade or business who make certain payments in the course of that trade or business (including rent) of $600 or more in any tax year to another person must now report that information to the IRS.

This provision is applicable for payments made after Dec. 31, 2011. Under this provision, payments subject to information reporting will also include amounts in consideration for property and gross proceeds.

Now, as a result of this new provision, recipients of rental income from real estate are subject to the same information reporting requirements as taxpayers engaged in a trade or business.

The rental property expense payment reporting doesn't apply to:

  • Any individual who receives rental income of not more than a minimal amount, as determined under IRS regulations
  • Any individual (including one who is an active member of the uniformed services or an employee of the intelligence community) if substantially all rental income is derived from renting the individual's principal residence
  • Any other individual for whom the requirements would cause hardship, as determined under IRS regulations

     

    Under U.S. Treasury Department guidelines, we hereby inform you that any tax advice contained in this communication is not intended or written to be used, and cannot be used by you for the purpose of avoiding penalties that may be imposed on you by the Internal Revenue Service, or for the purpose of promoting, marketing or recommending to another party any transaction or matter addressed within this tax advice. Further, RubinBrown LLP imposes no limitation on any recipient of this tax advice on the disclosure of the tax treatment or tax strategies or tax structuring described herein.

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